1. Network Operations Model Go-Live Decision Kenneth Ragsdale TAC July 1, 2010

2. 2 Readiness Methodology ERCOT will measure readiness by the following categories: –System Readiness – an evaluation of a particular system needed to support identified market activities –Process Readiness – an evaluation of the Processes and Procedures necessary to support identified market activities –People Readiness – an evaluation of ERCOT and Market Participant capabilities to support identified market activities ERCOT reviewed the readiness criteria at the 6/23/10 NATF and is requesting a vote from the 7/1/10 TAC on the Market Readiness Criteria per Section 21.12.3, Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision. July 1, 2010 TAC

3. 3 Protocol 21.12.3 21.12.3 Notice to Market Participants of Effective Date for Nodal Protocol Provisions and Retirement of Zonal Protocol Provision No part of the nodal market design may start operation until all the Market Readiness Criteria for that part of the nodal market design have been met. Certification that all Market Readiness Criteria have been met must be made at least by each of the following: the Technical Advisory Committee (TAC), ERCOT and the ERCOT Board. Upon such certification, ERCOT shall issue two Notices alerting Market Participants to the effective date of Nodal Protocol sections and the retirement of Zonal Protocol sections, as applicable. ERCOT shall issue the first Notice no less than thirty (30) days prior to the effective date or retirement date, as applicable, and the second Notice no less than ten (10) days prior to the effective date or retirement date, as applicable. The Notice shall include: (1)The Nodal Protocol Sections to become effective; and (2)The Zonal Protocol Sections to be retired, if any. July 1, 2010 TAC

4. 4 Nodal Program Cutover Cutover Timeline Key Dates (Aug – Oct) Network Operations Modeling 08/01 09/01 10/02 10/13 10/15 Begin transition plan for Network Modeling timelines Deadline to submit Model changes for Month of December Network Model built for PCRR Allocation Network Model built for CRR Auction Model complete and available for Market Participant testing Outage Scheduling 08/14 10/02 10/13 Begin transition plan for Outages occurring in December December Outages pulled for initial CRR Network Model December Outages pulled for CRR Network Model Credit Management10/21Initial Credit Limit for CRR Auction posted Congestion Revenue Rights 8/13 10/18 10/20 Last day to Register for CRR Monthly Auction PCRR Nominations close for December Allocation Allocation results published / Network Model Posted July 1, 2010 The table below outlines key dates and activities requiring Market Participant support

5. 5 TAC Network Operations Modeling – Go Live System ReadinessPlanned Completion Status SEM Go-Live 8/31/09Complete TSP Model Validation (Metric MP14C) 4/30/10Complete Model Change Request Tools Support Market Updates OngoingGreen Regular Model Loads into Market Trials Systems OngoingGreen 8 Hour LFC Test Executed w/ Network Model from NMMS 6/17/10Complete Process Readiness Network Operations Change Request Timeline Transition Plan established 6/03/10Complete Network Modeling Procedures Ready 8/01/10Ongoing Market Rules – Protocol Transition Plan for September 7/23/10In Progress July 1, 2010

6. 6 TAC Network Operations Modeling – Go Live People ReadinessPlanned Completion Status ERCOT Staff Support of Market Trials OngoingGreen ERCOT Staff Trained on System and Processes 6/22/10Green Market Participant Training Delivered 7/29/09Green Readiness Review and Approval NATF Review 6/23/10Reviewed ERCOT Management Approval 6/26/10In Progress TAC Approval 7/01/10 BOD Approval 7/20/10 30 Day Market Notice 7/30/10 10 Day Market Notice 8/20/10 July 1, 2010

7. 7 6/23/10 NATF Issues Discussed Placeholder slide – update forthcoming NATF Risks/Concerns Identified Mitigation Plan/Recommendations July 1, 2010 TAC

8. 8 For TAC Consideration Possible motion for TAC consideration: TAC certifies that all Network Operations Model Go-Live Market Readiness Criteria have been met or are on schedule to be delivered according to the go-live sequence. TAC recommends that the Board also certify that all Market Readiness Criteria have been met for the Network Operations Model Go-Live on September 1, 2010. TAC requests ERCOT Staff promptly notify NATF if any outstanding issues prevent proper maintenance and operation of the Network Operations Model. July 1, 2010 TAC